Business Recorder (28/07/2020) SINGAPORE: Malaysian palm oil futures ended a three-session rally to drop nearly 4% on Monday as traders booked profits and on expectations of higher output.
Palm oil for October delivery on the Bursa Malaysia Derivatives Exchange (BMD) fell to 2,671 ringgit ($628.47) a tonne at the close.
Two leading industry analysts told Reuters on Friday that palm oil prices would fall by the fourth quarter due to higher output and inventory levels, dampening a recent rally.
The contract had hit a five-and-a-half-month high last week as heavy rains in top producer Indonesia led to a drop in output.
Profit-taking after sharp gains over the last few days dragged prices, a Kuala Lumpur-based trader told Reuters, adding that improving production in Malaysia and Indonesia pressured prices.
A narrowing price discount with rival soyaoil also contributed to slipping prices.
Soyaoil on the Dalian Commodity Exchange fell 1.2%, while the palm oil contract was flat. Soyaoil on the Chicago Board of Trade declined 1%.
Anilkumar Bagani, research head of Sunvin Group, said top importer India's palm oil buying is likely to slow down, with domestic prices facing resistance as prices of competing soft oils are neck and neck with processed palm oil prices.
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